PREVIEW-Czech c.bank to keep rates flat in December

                                
 WHAT: Czech central bank meets on rates
                                
 WHEN: Dec. 22, decision at 1200 GMT, news conference 1330
GMT
                                
 REUTERS FORECAST: All 19 analysts expect the bank to keep
the key two-week repo rate <CZRP=> <CZCBIR=ECI> flat at record
low 0.75 percent.
                                
 All said the next move will be a hike. Four saw it in the
first quarter next year and 10 forecast the tightening for the
second quarter. One analyst expected a hike as soon as February.
One forecast Czech rates to stay flat over the whole next year.
                                
 The main rate should rise to 1.25 percent in a year's time,
the median forecast in the poll showed.
                                
 
                                
 FACTORS TO WATCH: The Czech central bank's outlook for
miserable growth in 2011 along with absence of demand-led price
pressures will prevent policymakers from budging on interest
rates next week, a Reuters poll showed.
                                
 Consumer inflation was on target over the past two months
and a touch below the central bank's forecast. [ID:nLDE6B71CF]
[ID:nLDE6A218E]
                                
 The bank surprised analysts last month with its forecast for
next year's GDP growth of only 1.2 percent, a sharp deceleration
from this year's expected 2.3 percent, citing government
austerity as the main reason for the sluggishness.
                                
 That forecast implied a delay in rate tightening until the
end of next year, from around the middle of the year seen in the
previous forecast.
                                
 But analysts appear to have shrugged off the rate outlook
and most continue to expect tightening in the middle of next
year. Interest rate markets also price in the first hike at
around June.
                                
 The central bank's next forecast is due in February and some
analysts said the bank may revise up the growth outlook.
                                
 But Vice-Governor Mojmir Hampl told Reuters the forecast was
realistic due to external factors, inventory cycle, fiscal
tightening and low fixed investment, and said rates could move
either way if the euro zone debt crisis spreads, which he said
was now more likely then he thought earlier. [ID:nPRG004575]
                                
 The other Vice-Governor Vladimir Tomsik also said no move in
rates could be ruled out in the future. [ID:nLDE6BC0HG]
                                
 Three other central bankers, Eva Zamrazilova, Robert Holman
and Pavel Rezabek, have spoken in favour of tightening although
none said they would vote for a hike in December.
                                
 The bank has only changed rates twice in December over the
past decade, in 2008 and 2009, years affected by the global
economic crisis. 
                                
 
                                
 MARKET IMPACT: Forward markets have priced in stable rates
until June, so rates may jump if the bank delivers a hike or in
the event a hawkish stance at the press conference following the
decision. A dovish tone from the board would likely weaken the
crown.
                                
 
                                
 For table:                                 [ID:nLDE6BF0P1] 
                                
 Czech central bank web site                www.cnb.cz
                                
 All Czech economic data:                   <ECONALLCZ>
                                
 Central and Eastern Europe market report:  [CEE/]
                                
 
  (Reporting by Mirka Krufova, writing by Jana Mlcochova)